MLA pension reform introduced in legislature
Premier David Alward's Progressive Conservative government is forcing New Brunswick's MLAs to roll back the generous pensions they awarded themselves three years ago.
Deputy premier Paul Robichaud introduced the bill Tuesday afternoon in the provincial legislature.
Alward, who campaigned on a promise to roll back the pension increase, said he had been very clear he would take action.
"This very much is in follow-up to what the commissioner had recommended when he did his work leading up to April 2008," he told reporters.
The change will affect current MLAs as well as any members who left politics after the 2008 changes and are already collecting benefits. MLA pensions will be reduced by about one-third.
"It is a retroactive decision in that those who have not returned since 2008, those who have retired, on a go-forward basis, will see their pensions reduced, although this will not claw back what they have received to this point," said Alward.
In April 2008, New Brunswick politicians voted to increase their base salary to $85,000 from $45,347. In exchange, the MLAs terminated two tax-free allowances that previously were used to supplement their incomes.
That change ended up generating huge increases in MLA pension benefits because pensions are based on salaries and the increase in the total wage package flowed directly through to their retirement accounts.
The province's MLAs came under intense scrutiny for the decision, which gave them one of the richest political pension plans in the country. There were several calls for a review.
The bill introduced on Tuesday will still leave MLAs with pensions that are about 25 per cent higher than what existed prior to April 2008. For example, an MLA that has served 10 years in the legislature had a pension of $20,406 prior to the 2008 changes. After 2008, their pension ballooned to $38,250.
Under the new plan, an MLA with 10 years of service will receive $25,500.
Cabinet ministers will have to contribute more into their pension fund and severance payments will be scaled back.
"This is not an easy decision. This certainly affects members who are sitting and have sat in the past. Certainly, I believe this is the right decision," said Alward.
Liberal Leader Victor Boudreau said his party will support the legislation and it's time to move on.
"I think it's time that we do turn the page and focus on some of the other important issues that the government and the opposition have to deal with," he said.
MLAs will still have to serve in eight sessions — roughly two full terms — in the legislature in order to collect a pension.
It's not clear whether the bill will pass third reading by the time the legislature adjourns, which could happen at the end of this week.